Top 2016 Predictions for Selling and Buying Websites
2015: Year in Review
In 2015, the website selling and buying industry experienced unprecedented growth. While some brokers struggled to navigate the rough seas, we sailed right into some of our best months ever.
It was an all-around great year for us— we surpassed the $4M mark in sites sold for 2015 alone.
From Q1 to Q4 we managed to double the size of our average sale which helped push our numbers towards the end of the year.
Our largest sale was around $300,000 and our smallest was about $2,000. Our $5K – $20K sales increased, probably due to sellers migrating over from Flippa.
After going over our year-end stats, we noticed a few common trends, which we also discussed a bit on a recent podcast episode.
Sites That Sold Quickly
- Amazon affiliate sites with > 2-years of history
- Lead generation sites with > 2-years of history
Sites That Didn’t Sell Quickly
- Sites that needed a lot of time and work to get a marginal profit return
- Sites that were limited to a certain geographic area
- Tech sites that the buyer would need a lot of tech expertise to run
Looking Forward to 2016
Through 2016, we anticipate there will continue to be an increase in people looking for alternative ways to make money, and directing their attention to selling and buying websites.
Besides, who doesn’t like making cash? Especially when you can control how you’re making it!
Why? A couple of our best theories:
Widely-Available and Accepted Internet Lifestyle
People are becoming more educated and less intimidated with the world of eCommerce. This opens the floodgates as folks who previously had a mostly corporate or traditional background become more comfortable in the online space.
With 60% of the world’s population having internet access and over 1 billion people having active Facebook accounts, it’s a fair assumption that more people are using the internet more and more these days. They’re on their phones, and they’re shopping— not just for big dollar purchases but for toothpaste and toilet paper.
People are no longer intimidated by what were once ‘techie’ terms such as SEO or user interface. These people are intrigued and curious about investing in websites.
They will likely want to get their toes wet and test the waters, investing in passive websites that can basically run themselves, have a proven track record, and a decent profit margin. Or there will be a few brave souls that just want to jump right in. They aren’t afraid of putting in long hours to take a website that needs a lot of work, but has good potential, and turn it into a real money making machine.
The Gamer Generation
The Gamer Generation is coming into more disposable income. They are either entering top-level executive leadership roles, or their start-up companies and entrepreneurial ventures are now bringing in consistent revenue.
What’s the Gamer Generation? They’re the generation that came after the Baby Boomers. With the exception of the Baby Boomers, the U.S. Census Bureau doesn’t classify generations. There’s no exact years of the Gamer Generation, however, it is widely considered to be 1973 through 1982. Kind of a mix of Generation X and Generation Y, for those of you keeping track.
Gamers grew up playing games like Atari Pong and Magnavox Odyssey. They grew up learning about strategy, problem-solving, and competition. Gamers entered the workforce, with determination— that they learned so well from months of nonstop play, finally beating Level 7 in PacMan.
They climbed up the career ladder on a mission to reach the top. Well their time has come. They have more disposable income and are eager for a challenge. They want to invest their hard earned dollars in eCommerce because they see it as a game of strategy. Plus, it’s way more entertaining than watching the bell ring on the New York Stock Exchange.
Gamers will be interested in diversified online portfolios. They are excited for a challenge and excel at managing many different components at one time. They would rather purchase a variety of sites that are up and turning a profit, but have areas that could use fine tuning and optimization. They will not be keen on managing multiple sites that need to be completely rebuilt. In a sense, the Gamer wants the game created and ready to play.
What’s Hot and What’s Not Predictions
Amazon FBA (Fulfillment By Amazon) sites are hot right now.
There is high demand for FBA sites. These sites can offer large profit margins and be easy to run.
The products the site offers are stored at an Amazon warehouse and Amazon handles everything from the customer service to the shipping.
There’s no question about Amazon having an established customer base. Amazon is the world’s largest retailer. They have top-notch customer service that takes care of customer questions, complaints, and returns. There will be no need to spend money on customer service reps or conjuring up customers.
With an Amazon FBA site that is running full steam, you only need to provide the products to sell. So, it’s easy to see why Amazon FBA sites are in high demand. They are only just starting to trickle into the market as they come to maturity and owners are looking to cash in.
What else is a sexy space to get into this year?
- Multi-channel eCommerce sites are also hot. They are seen as a mature, more intelligent investment than single-channel eCommerce sites.
- Single-channel eCommerce sites will not be in as high of demand as multi-channel eCommerce sites. That doesn’t mean you should discount them altogether! With everyone looking to multi-channel, you should be able to find some great single-channel deals out there.
- AdSense/Amazon affiliate sites will continue to be hot. Look to pay a premium price for sites older than 2-years. These sites sell fast.
- Niche App Business sites are starting to slowly come onto the market. Flippa already has an app designated category. We’re approaching with caution, as we’re still trying to nail down a vetting process for them. What stats do you vet them with? Accept subscription based apps only? Our hope is that by the end of the year we will have more information and solid analytics to be able to form a set of criteria; possibly setting the stage to break into apps. Note the use of the word ‘possibly’. (Side note: Vetting businesses and understanding what we’re encouraging buyers to get into is an important foundation belief in our marketplace. We never want people to buy something we wouldn’t buy ourselves — and we wouldn’t buy something we don’t totally understand, backed by data.)
- Productized Service businesses are close to taking off, but will it be this year or next year that they hit the market? These businesses are great if you have a very specific niche service that you can offer and package up with a tight bow. If you love the do-it-yourself approach, you might really enjoy a productized service business.
Look for ways to pool money to purchase more sites to add to your portfolio. Does your portfolio have enough diversity? Diversity means security and security is a great thing to have if you are planning on leveraging your savings on websites to travel the world.
If you are looking for investment capital to purchase sites for your portfolio but running into a brick wall at your bank, there are more options now than there were 10 years ago.
- Lendvo caters to the online business community. It understands the unique needs of online sellers and investors. They will finance up to $100,000 for qualified applicants.
- U.S. Small Business Association offers resources for acquiring a small business loan. Depending on SBA approval, it would guarantee the loan, making you more likely to get the loan. (We’re sure there are European, Australian, South American, Asian, etc business programs out there as well, we’re just not as familiar with them.)
- Angel Investors are private individuals that invest their own money in exchange for a certain percentage of ownership/profits, etc. The average investment is somewhere between $25,000 and $100,000. A venture capitalist on the other hand typically works from a capital pool of $10 million+ and wouldn’t be interested in small-scale investments (there are always exceptions to be made).
….and FINALLY… drum roll please…
Our Investor Program
Ok, this is more of an announcement/reminder, but we’d be remiss if we didn’t touch on it while we are talking about what’s big on the selling and buying horizon for you guys in 2016.
If you are looking to invest and build your portfolio, but don’t want to do all the leg work involved in the day-to-day operations, this might be for you.
The concept is simple. We find, vet, and purchase a portfolio of websites for a group of investors. Then, we take over the growth strategy and operations. Leverage our skills and experience and create a passive website portfolio for yourself. We offer a 70/30 split after expenses with the bulk going to the investors.
We launched a beta test in 2015, and after ironing out some details, we will be opening it up again this spring. We are tentatively aiming for end of March/early April. Want to hear more when we open up the next investor round?
Click here and select “Investor Program” and we’ll be in touch!
Our Plans to Make 2016 the Best Year Yet
With one of our best years behind us, we are anticipating making 2016 even better.
In addition to the highly-anticipated Investment Program rollout and breaking into the upper tiers of upper six-figure/low seven-figure sites, look for even more high-value, engaging content from us.
What are you interested in changing up for your empire in 2016? Or are you in “stay-the-course” mode right now? We love hearing about different models and plans for the upcoming year — let us know in the comments below!
Great episode guys, very interested to start seeing productized businesses being sold. The first wave are now maturing to the point where founders are replacing themselves with a sales guy for their 3 to 4 figure packages. Interested if there is any significant asset value if a service biz is selling predominantly one off packages (i.e. done for you sales funnels) even though has good pipeline / sales process? Also interested in what type of multiple a WP Curve would have as that’s the most SaaS like and would likely be the highest. Cheers!